The annual proxy for this company that operates securities exchanges had the following proposals:
- Proforma votes on directors, appointment of auditors, and “say-on-pay” advisory vote
Magni for and against proforma proposals:
- For and against directors – Since the last proxy, the company has not improved in this area. The board needs to be more independent. Magni voted against Mr. Carey who is a legacy of the CBOT transaction and no longer needs to serve on the board. Magni also voted against Mr. Gepsman and Mr. Shepard who are both long-term CME employees and hence not independent. The company should seek new board members, particularly ones with CEO or CFO experience with public companies.
- For auditors – There appear to be no controversies with the financial statements of the company.
- Against “Say-on-pay” Advisory Vote – Since the last proxy, the company has not improved in this area. The proxy materials did not discuss shareholder engagement. The peer group was disclosed, but the process for selecting the peer group was discussed in very conceptual terms. It is not clear if the peer group was set objectively or if it skewed the analysis of compensation. Both shareholder engagement and peer group benchmarking are important components of corporate governance. This company’s incomplete approach justifies a vote against the proposal.